What happens to provisions in the Cool Binz franchise agreement that conflict with limitations on noncompetition covenants in Washington?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
he Washington Franchise Investment Protection Act or any rule or order thereunder except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel. Provisions such as those which unreasonably restrict or limit the statute of limitations period for claims under the Act, or rights or remedies under the Act such as a right to a jury trial, may not be enforceable.
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- Transfer fees are collectable to the extent that they reflect the Franchisor's reasonable estimated or actual costs in effecting a transfer.
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- Pursuant to RCW 49.62.020, a noncompetition covenant is void and unenforceable against an employee, including an employee of a franchisee, unless the employee's earnings from the party seeking enforcement, when annualized, exceed $100,000 per year (an amount that will be adjusted annually for inflation). In addition, a noncompetition covenant is void and unenforceable against an independent contractor of a franchisee under RCW 49.62.030 unless the independent contractor's earnings from the party seeking enforcement, when annualized, exc
Source: Item 23 — RECEIPTS (FDD pages 63–238)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, any provisions within the franchise agreement that conflict with Washington state's limitations on noncompetition covenants are considered void and unenforceable in Washington. This stems from RCW 49.62.020 and RCW 49.62.030, which outline specific earnings thresholds for employees and independent contractors regarding the enforceability of noncompetition covenants.
Specifically, a noncompetition covenant is unenforceable against an employee if their annualized earnings from the party seeking enforcement do not exceed $100,000, an amount that is adjusted annually for inflation. Similarly, for an independent contractor, a noncompetition covenant is unenforceable if their annualized earnings from the enforcing party do not exceed $250,000, also adjusted annually for inflation.
Furthermore, RCW 49.62.060 prohibits Cool Binz from restricting a franchisee from soliciting or hiring employees of other Cool Binz franchisees or employees of Cool Binz itself. Any provisions in the franchise agreement that attempt to impose such restrictions are also void and unenforceable in Washington. This ensures that franchisees in Washington are not unduly restricted in their ability to hire and compete for talent.